China'ssecurities regulator has set a two-year deadline to close the cross-borderchannel that let mainland investors trade global stocks through offshorebrokers, and the bill is already showing up in earnings.The ChinaSecurities Regulatory Commission (SRC) named three firms on May 22 and disclosedabout $331 million in fines and confiscated income across two of them. A new FM Intelligence analysis breaks down who pays, how muchrevenue is at risk and how fast it could disappear.FutuHoldings disclosed a proposed penalty of about RMB1.85 billion, or roughly $271million, while UP Fintech, the parent of Tiger Brokers, reported RMB411.2million, about $59.7 million. Theregulator did not attach a figure to the third firm, Longbridge Securities. FinanceMagnates.comfirst reported the Futu penalty when the company disclosed it.The Penalties Hit ReportedProfit but Not the Underlying BusinessThe chargescut Futu's reported first-quarter net income 61.2% to HK$831 million, andpushed UP Fintech to a $26.9 million net loss against a $30.4 million profit ayear earlier. Both firms booked the penalties as one-time items.Strip outthe charge and the operating picture looks different. Futu's revenue rose24.7%, funded accounts climbed 34.3%, and client assets grew 47.2% year overyear. UP Fintech's revenue rose 26.3%."Thisamount does not impact our business fundamentals or financial stability,"said Arthur Yu Chen, chief financial officer of Futu Holdings.Investorstook a darker view at first. Futu shares fell 27.5% on the day, then reboundedabout 20% three sessions later, helped by an S&P Global Ratings decision toreaffirm the company'sinvestment-grade rating.How Much Mainland RevenueIs Actually at StakeThis iswhere the FM Intelligence modeling comes in. Futu has said mainland clientsmake up about 13% of funded accounts but roughly 20% of revenue, a gap thatsignals each mainland account is worth more than the firm-wide average.Because thewind-down lets existing clients only sell and withdraw, that revenue erodesover two years rather than vanishing at once. FMIntelligence models three paths for how much survives, with a base case thatsees the mainland contribution roughly halve in the first year and shrinkfurther in the second.The actionis not isolated. The CSRC first declared the activity illegal back in 2022,when it ordered Futu and UP Fintech to stoptaking new mainland clients, and the latest penalties sit inside an eight-agency plan approved bythe State Council.The full FM Intelligence analysis lays out the scenario ranges, theannualized revenue exposure and why the regulator's two-year deadline may runfaster than an orderly runoff.This article was written by Damian Chmiel at www.financemagnates.com.